January 10, 2013

By Ed Avis

            Margarita’s is a chain of 23 Mexican restaurants in the Northeast. Founded in 1985, the chain succeeds in producing high-quality Mexican cuisine in a festive atmosphere. That means millions of dollars of product flow through its system every year. How does management decide where that money is going?

            Recently I spoke with Brisbane Vaillancourt, director of training for Margarita’s, about the restaurant’s product and vendor selection process. If your company wants to sell to successful small chains, you might find Vaillancourt ‘s comments useful.

Choosing What’s On the Menu

            Margarita’s revises its menu once per year, and creates a specials menu that changes three or four times each year. Where do the menu items come from?

            First, the owners travel to Mexico regularly and see what’s new there.

            “They don’t necessarily see something and put it exactly on the menu,” Vaillancourt says. But they try new dishes, see trends, sample new ingredients, and generally bring back ideas that can be applied to Margarita’s menu.

            The restaurant also gets ideas from its employees, largely through a program  they call Iron Chef and Steel Bartender. This program encourages employees to dream up new menu items and drinks. Management chooses the 10 best ideas in each category, judging them by quality and also by profit potential. “We go through them and say, ‘Is this something we can do in the restaurant and make profitably?’” Vaillancourt says.

            Then they hold a “showdown” at which the entrants make their dishes or drinks. Management throws in a “secret ingredient” to make it more challenging – last year’s was avocado. Sometimes the winning dish and drink make it to the menu.

            Finally, Vaillancourt says it’s important for Margarita’s personnel to keep up with menu trends by reading magazines and watching food programs on TV.

            “Food is like fashion – you always want to stay up with the trends,” she says. “Especially if you’re doing a specials menu, you want to feature what the current trends are.”

Next Comes Sourcing

            So how does Margarita’s find the suppliers it needs to craft its menu items? The choice can be made one of three ways:

            First, often they just ask their distributor, PFG Northcenter Foodservice, if they have what is needed. Vaillancourt says Margarita’s has been working with PFG Northcenter Foodservice for 20 years, so there is a high level of trust there.

            Even though PFG Northcenter is the chain’s primary distributor, it still has many relationships directly with manufacturers.

            The second way they find suppliers is when salespeople call. “A lot of manufacturers have sales personnel who are out and about, calling on our corporate office,” Vaillancourt says.

            These sales people will often bring samples, which Vaillancourt says is important because the decision-makers want to see, smell, touch, and taste the potential food items.

            The sales people often conduct “cuttings,” which are demonstrations during which they exhibit their wares. For example, she said Olé Mexican Foods recently presented its tortilla products. “Olé came to us and said, ‘We have the best product and we want to supply your restaurants.’”

            Margarita’s was convinced and now they are buying their tortillas from Olé. The product still moves through PFG Northcenter, but Margarita’s made the deal directly with Olé.

            Finally, Vaillancourt says sometimes they find new suppliers that advertise or are written about in magazines or discussed in television food programs. When they see a product advertised or otherwise mentioned that they want to try, they contact the manufacturer directly, Vaillancourt says. “If we see a product in an ad we call them and say,  ‘Hey, I’d like to try this product.’”

What is Important?

            Naturally, Margarita’s doesn’t just pick a vendor because they can supply a particular product. They evaluate each vendor carefully.

            “It’s like when somebody is trying to sell you a car. You don’t just put the key in the ignition and drive off,” Vaillancourt says.

            Quality is the number one thing Margarita’s seeks. “That’s always number one,” Vaillancourt says. “You can decrease the price all you want, but if you’re not putting quality product in front of your customers, they won’t return.”

            Price, thus, definitely takes a backseat to quality at Margarita’s.

            Reliability of the supplier is also an issue, but Vaillancourt says the suppliers Margarita’s works with typically have no trouble delivering what they’ve promised.

            Vaillancourt said Margarita’s occasionally signs long-term contracts with suppliers, but only if there is a clear price benefit for doing so. Even then, though, quality still reigns – the greatest price in the world will not persuade them to sign a deal for inferior product.

            At the end of my conversation with Vaillancourt, I asked her if there was anything else about this topic she would like to mention. She reiterated her point about traveling, reading magazines, and watching TV to learn about trends: “You have to stay in tune with what’s going on in the world.”

Ed Avis is the publisher of el Restaurante Mexicano. He would love to hear your comments about this article: edavis@restmex.com.

January 10, 2013